Question 1

Warranties in insurance contracts:
A)are of great importance.
B)may be expressly included in the contract, be clearly incorporated by reference, or be implied.
C)may be used to avoid liability in all states, whether or not the breach of warranty is material.
D)are becoming increasingly easy to use as a basis for an insurer to avoid liability on a policy when an insured breaches.

Accepted Answer

The answer of Warranties in insurance contracts:
A)are of great importance.
B)may...

Question 2

Mary cleaned her dorm room in the spring and left a pile of books in Sara's room.Mary told everybody that the books were a gift to Sara.Does Sara have to dispose of them?
A)Yes, because there was a present intent and delivery.
B)Yes, because they are constructively in Sara's possession.
C)No, because Sara did not accept the books.
D)No, because there was no agreement between the two parties.

Accepted Answer

The answer of Mary cleaned her dorm room in the...

Question 3

The rights of a holder of a negotiable document of title to whom it has been duly negotiated include:
A)title to the document.
B)title to the goods.
C)all rights accruing under the law of agency or estoppel.
D)All of the above.

Accepted Answer

The rights of a holder of a negotiable document of title who has received it through due negotiation include title to the document, title to the goods covered by the document, and all rights arising under the law of agency or estoppel. Therefore, all of the above options are correct.

Question 4

For an insurance applicant's misrepresentation to have legal consequences:
A)the insurer need not have relied on it as an inducement to enter the contract.
B)the misrepresentation must be material.
C)the applicant must have known it was false at the time the applicant made the statement.
D)All of the above.

Accepted Answer

For an insurance applicant's misrepresentation to have legal consequences, it must be material. This means that it must be important enough to influence the insurer's decision to enter the contract. The insurer must also have relied on the misrepresentation as an inducement to enter the contract. The applicant's knowledge of the falsity of the statement at the time it was made is not required for legal consequences.

Question 5

Collin insures his building for $250,000.At the time of its total loss, the property is valued at $220,000.Under:
A)an open policy, Collin would recover $220,000.
B)an open policy, Collin would recover $250,000.
C)a valued policy, Collin would recover $220,000.
D)Both (a) and (c).
E)Both (b) and (c).

Accepted Answer

In an open policy, the insured is only entitled to the actual cash value (ACV) of the property at the time of loss, which in this case is $220,000. This is because the policy is not based on a specific value, but rather on the actual value of the property at the time of loss.
In a valued policy, the insured is entitled to the full amount of the policy limit, regardless of the actual value of the property at the time of loss. However, this type of policy is rare and typically only used for specific high-value items such as fine art or jewelry.

Question 6

Explain the difference between lost, mislaid, and abandoned property and who has rights to it.

Accepted Answer

The answer of Explain the difference between lost, mislaid, and...

Question 7

Mark wants to give Susan his car.How can he effectively "deliver" it?
A)By giving Susan the keys.
B)By giving her an indorsed title certificate.
C)By making her take it for a period of time.
D)By providing it under a bailment.
E)Both (a) and (b) are correct.

Accepted Answer

The most effective way to transfer ownership of a car is by both giving Susan the keys and an indorsed title certificate. This will ensure that Susan has legal proof of ownership and the ability to register and insure the car in her name. The other options such as making her take it for a period of time or providing it under a bailment are not effective ways to transfer ownership.

Question 8

Property may be classified as:
A)tangible and intangible.
B)real or personal.
C)physical and imaginary.
D)Both (a) and (b).

Accepted Answer

Property can be classified as tangible (such as land, buildings, and physical assets) or intangible (such as intellectual property rights, goodwill, and patents) and real property (such as real estate) or personal property (such as cars, boats, and furniture). Therefore, options (a) and (b) are both correct choices.

Question 9

Marilyn brought her $300 silk dress to University Dry Cleaners to be cleaned.On the back of the ticket she received in exchange for the dress was written, "Liability limited to ten times the cost of cleaning." Marilyn's dress was lost and University now claims it owes her only $96.50, ten times the cost of cleaning.Is that true?
A)No, because Marilyn is not a bailor.
B)No, because they are common carriers.
C)No, because the limitation was not communicated to her.
D)No, because the limitation is unconscionable.

Accepted Answer

The limitation of liability was not communicated to Marilyn, which means it is not enforceable.

Question 10

Carol took her earrings off at Marcia's beauty shop and put them on the counter.She left the shop without remembering the earrings.Betty finds them and wants to keep them.Can she?
A)Yes, since she is a finder.
B)Yes, she now is the true owner.
C)No, since the earrings were personal property.
D)No, Marcia would have the right to keep them as against anyone but Carol.

Accepted Answer

Marcia has a possessory right over the earrings as she was the last one known to have control over them. Therefore, Betty cannot keep them as against Marcia. However, Marcia would have to return the earrings to Carol if she comes back looking for them.

Question 11

Dr.Olson is a board-certified ophthalmologist who constructs some specially designed examining tables to use in looking at his patient's eyes.The tables are firmly attached to the floor of the space he rents for his office.If Dr.Olson decides to move his office, which of the following is correct?
A)The tables are fixtures that cannot be removed.
B)The tables are trade fixtures.
C)Dr.Olson may remove the tables if they can be removed without materially damaging the realty.
D)Both (b) and (c) are correct.

Accepted Answer

The answer of Dr.Olson is a board-certified ophthalmologist who constructs...

Question 12

Margaret told Bill she would give him her concert tickets.Later she changed her mind and decided she wanted to use the tickets after all.Is Margaret required to give Bill the tickets?
A)No, because there was no intent to make a present transfer.
B)No, because there was no delivery.
C)No, because there was no acceptance.
D)All of the above are correct.

Accepted Answer

The answer of Margaret told Bill she would give him...

Question 13

Showplace insures its $160,000 building with two insurers: with Hometown Insurance for $60,000 and with National Insurance for $120,000.The building suffers a fire loss of $75,000.From whom and for how much can Showplace collect?

Accepted Answer

The answer of Showplace insures its $160,000 building with two...

Question 14

Why are delivery and acceptance both necessary for a valid gift? Explain.

Accepted Answer

The answer of Why are delivery and acceptance both necessary...

Question 15

Insurance protects a business from:
A)tort liability.
B)strict liability.
C)negligence.
D)damage from natural causes.
E)All of the above.

Accepted Answer

Insurance can protect a business from many types of liability, including tort liability, strict liability, and negligence. Additionally, it can provide coverage for damages caused by natural disasters or other unexpected events. Therefore, the correct answer is E, all of the above.

Question 16

A bill of lading serves as:
A)a receipt for damages.
B)evidence that a binder exists.
C)a document of title.
D)a contract for employment.

Accepted Answer

A bill of lading is a legal document that serves as evidence of a contract of carriage between a shipper and a carrier. It is also considered a document of title, which means that it gives the holder (usually the consignee) the right to take possession of the goods mentioned in the document. It is not a receipt for damages or a contract for employment, and it does not relate to the existence of a binder.

Question 17

If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they would own one-third of the mixture by:
A)accession.
B)adverse possession.
C)prescription.
D)confusion.

Accepted Answer

The answer of If Jim, Ken, and Lee each deposit...

Question 18

Which of the following statements is true of insurance policies?
A)The basic principles of contract law apply to insurance policies.
B)Insurance companies tend to standardize their policies.
C)Some states forbid standardization of insurance policies.
D)All of the above.
E)(a) and (b), but not (c).

Accepted Answer

The basic principles of contract law do apply to insurance policies. Insurance companies do tend to standardize their policies. However, some states do not allow standardization of insurance policies. So, options (a) and (b) are correct, while option (c) is false. Therefore, option E is the correct answer.

Question 19

Which of the following is/are the criteria for a common carrier?
A)The carriage must be part of its business.
B)The carriage must be for remuneration.
C)The carrier must represent to the general public that it is willing to serve the public in the transportation of property.
D)All of the above.

Accepted Answer

All of the above criteria must be met for a carrier to be considered a common carrier.

Question 20

Larry leaves his hat under the seat at the movie theater.Is this a bailment?
A)No, because the theater manager does not have physical possession of the goods.
B)No, because Larry did not pay the theater to keep his hat.
C)Yes, if the theater manager finds it.
D)Yes, since the theater controls the building.

Accepted Answer

A bailment is created when the owner of personal property gives possession of the property to another person for a specific purpose, with the intent that the property will be returned to the owner. In this case, Larry left his hat under the seat at the movie theater, which could be seen as giving possession of the hat to the theater manager for safekeeping until it is found. If the theater manager does find the hat, they would have a duty to return it to Larry, creating a bailment.

Quiz 48: Introduction to Property, Property Insurance, Bailments, and Documents of Title

Warranties in insurance contracts:

Mary cleaned her dorm room in the spring and left a pile of books in Sara's room.Mary told everybody that the books were a gift to Sara.Does Sara have to dispose of them?

The rights of a holder of a negotiable document of title to whom it has been duly negotiated include:

For an insurance applicant's misrepresentation to have legal consequences:

Collin insures his building for $250,000.At the time of its total loss, the property is valued at $220,000.Under:

Explain the difference between lost, mislaid, and abandoned property and who has rights to it.

Mark wants to give Susan his car.How can he effectively "deliver" it?

Property may be classified as:

Carol took her earrings off at Marcia's beauty shop and put them on the counter.She left the shop without remembering the earrings.Betty finds them and wants to keep them.Can she?

Dr.Olson is a board-certified ophthalmologist who constructs some specially designed examining tables to use in looking at his patient's eyes.The tables are firmly attached to the floor of the space he rents for his office.If Dr.Olson decides to move his office, which of the following is correct?

Margaret told Bill she would give him her concert tickets.Later she changed her mind and decided she wanted to use the tickets after all.Is Margaret required to give Bill the tickets?

Showplace insures its $160,000 building with two insurers: with Hometown Insurance for $60,000 and with National Insurance for $120,000.The building suffers a fire loss of $75,000.From whom and for how much can Showplace collect?

Why are delivery and acceptance both necessary for a valid gift? Explain.

Insurance protects a business from:

A bill of lading serves as:

If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they would own one-third of the mixture by:

Which of the following statements is true of insurance policies?

Which of the following is/are the criteria for a common carrier?

Larry leaves his hat under the seat at the movie theater.Is this a bailment?